Weekly NewsWatch: Prepaid cards preferred over credit cards

Wondering which personal finance topics and news are trending this week in the UAE? Read more on the latest surveys, reports and news in our weekly wrap-up.

Do UAE residents prefer prepaid cards over credit cards?

Industry sources in UAE claim that prepaid debit cards are becoming more popular among UAE residents as a payment method instead of cash, credit cards or cheques. Reasons for the increase in popularity include the fact that just like credit cards they are accepted in most places and even people who don’t have a bank account are able to use prepaid cards. Also users can better control their spending and stick to their budget especially when travelling or shopping online.

According to MasterCard, the prepaid card usage in the Middle East by 2017 is estimated to reach $48 billion. UAE transactions are expected to reach $13 billion.

Based on a survey carried by Majid Al Futtaim Finance, 78 percent of UAE residents also prefer prepaid cards as gift options.

Visa statistics also state that 75 percent of cards issued for payments globally are either debit or prepaid cards.

The launch of Souqalmal.com Air Miles Calculator

Want to know how many miles you need to get flight tickets to popular destinations? This week Souqalmal.com launched its unique Air Miles Calculator which uses your monthly credit card spend to help you find out the number of flights you can get to destinations such as Beirut, London and Mumbai. The calculator will also allow users to compare multiple air mile credit cards and find out which one offers you the best deal.

VAT in the UAE by 2018?

According Younis Haji Al Khouri, Under Secretary at the UAE ministry of finance, Gulf states are planning to implementing value added tax (VAT) in the GCC region by the end of 2018. The implementation process is expected to take around 18 to 24 months, and this will be the first time direct taxation will be introduced to region. Industries which will be not be taxed include education, social services and healthcare.

Two thirds of adults not financially literate

Standard & Poor’s Ratings Services Global Financial Literacy Survey revealed that UAE residents who had a lower level of education and income were still more financially literate compared to residents in other emerging economies in the world. Other results included:

In the GCC 40% of men were considered financially literate compared to 36% of women.

On a global level, two thirds of the adult population is not considered financially literate.

In the UAE, the adult population doesn’t completely understand the concept of compounding interest.